Methods and systems for discounts management

ABSTRACT

A computer-implemented method and electronic system are provided in which payment information is exchanged between a buyer and seller. A user interface is provided that facilitates seller selection of an identified payment date and amount for early payment. The system operates on the seller selections to identify invoices that may be discounted based on seller selections and offers the discount to the buyer.

REFERENCE TO RELATED APPLICATIONS

This application is a divisional of U.S. patent application Ser. No.11/002,234, filed Dec. 1, 2004, which claims the benefit of U.S.Provisional Patent Application No. 60/581,022, filed Jun. 17, 2004, thedisclosures of which are incorporated herein by reference in theirentirety.

This application is related to the following United States patentapplications:

-   System and Method for Varying Electronic Settlements Between Buyers    and Suppliers With Dynamic Discount Terms, U.S. application Ser. No.    10/155,806, filed May 24, 2002 (now abandoned), publication number    US 2003-0220863, publication date Nov. 27, 2003, invented by Don    Holm, Duc Lam, and Xuan McRae;-   System and Method for Varying Electronic Settlements Between Buyers    and Suppliers With Dynamic Discount Terms, PCT application number    PCT/US03/15542, filed May 14, 2003, publication number WO    2003/100689, publication date Dec. 4, 2003, invented by Don Holm,    Duc Lam, and Xuan McRae;-   Method and System for Collaborative Vendor Reconciliation, U.S.    application Ser. No. 10/155,797, filed May 24, 2002 (now abandoned),    publication number US2003-0220858, publication date Nov. 27, 2003,    invented by Duc Lam, Georg Muller, Chandra (CP) Agrawal, Baby    Lingampalli, Pavel Lopin and Xuan (Sunny) McRae;-   System and Method for Electronic Authorization of Batch Checks, U.S.    application Ser. No. 10/155,800, filed May 24, 2002, U.S. Pat. No.    7,519,560, publication number US 2003-0220886, publication date Nov.    27, 2003, invented by Duc Lam, Matthew Roland and Xuan (Sunny)    McRae;-   System and Method for Electronic Payer (Buyer) Defined Invoice    Exchange, U.S. application Ser. No. 10/155,840, filed May 24, 2002,    U.S. Pat. No. 7,689,482, publication number US 2003-0220855,    publication date Nov. 27, 2003, invented by Duc Lam,-   Method and System for Invoice Routing and Approval in Electronic    Payment System, U.S. application Ser. No. 10/155,853, filed May 24,    2002 (now abandoned), publication number US2003-0220875, publication    date Nov. 27, 2003, invented by Bob Moore and Xuan (Sunny) McRae;    and-   Method and System for Buyer-Centric Dispute Resolution in Electronic    Payment System, U.S. application Ser. No. 10/155,866, filed May 24,    2002, U.S. Pat. No. 7,437,327, publication number US2003-0220843,    publication date Nov. 27, 2003, invented by Duc Lam, Celeste Wymand    and Xuan (Sunny) McRae.

All of the foregoing applications are incorporated herein by referencein their entirety.

FIELD OF THE INVENTION

This invention relates to the field of software and computer networksystems. In particular, the invention relates to electronic systemsassociated with financial transactions.

DESCRIPTION OF THE RELATED ART

In traditional paper payment systems, an organization or an individualinitiates payment by sending a physical check to the party to whom adebt is owed. The check may be sent in response to an invoice from theparty to whom the debt is owed. A newer approach is electronic payment.For example, in the consumer context, individuals may be able to makepayment by way of electronic banking. Payment instructions are sentelectronically from the individual's computer system to the individual'sbank. Payment is then effected by the bank.

Numerous systems now exist relating to accounting and bill payment. Forexample, computer software is used to track invoices and print paymentchecks. Payments may be made by wire transfer, with instructionsrequesting funds of the payer in one financial institution to betransferred to an account of the party to whom payment is to beeffected.

Enterprise resource planning (ERP) systems are used for managing thepurchases of goods and services. Such systems may have databases ofcomplex and extensive sets of information, such as addresses of varioussuppliers and similar information related to purchasing. Sellers alsouse electronic accounting and record keeping systems which may assist inthe receipt and tracking receipt of payment for goods and services.Prior systems require considerable amounts of effort to update andmaintain, and may lack compatibility with the systems used by partieswith whom an organization wishes to engage in transactions. There isthus a need for improved systems to facilitate transactions betweenbuyers and sellers.

SUMMARY

An embodiment of the invention is directed to a computer implementedbusiness method in an electronic system in which payment information isexchanged between a buyer and a seller. Approval is received from thebuyer of an electronic invoice received by the buyer. At a time when noagreed upon discount is available based on the invoice or pre-agreedterms between the buyer and the seller, a request is received from thebuyer to offer the seller early payment in exchange for a discount ofthe amount owed. The discount is based on an annual hurdle rate providedto the system by the buyer. The early payment is to be made on days fromamong a set of one or more days of the week configured in the system bythe buyer. The offer is presented to the seller on the seller's userinterface, and a clickable button is provided for the seller to indicateselection of such offer. The clickable button may include an indicationthereon that payment to the seller is to be made immediately. Suchindication may include a phrase such as “pay me now.” The electronicsystem may include a set of computers communicating over a network. Thesystem may include an enterprise resource planning (ERP) system andearly payment may be effected by the ERP system.

According to an embodiment of the invention, initially only informationregarding a first available payment date is presented to the seller, andinformation regarding other possible payment dates for such transactionis not initially shown to the seller. According to another embodiment ofthe invention, the invoice may be approved by the buyer after expirationof a discount term.

A user interface window may be provided for the buyer. The userinterface window may include an entry cell for the annual hurdle rate, acalculated daily discount rate that is based on the annual hurdle rate,and a list of days of the week in which individual days can be selectedby the buyer as days for payment for the offer to the seller. In anotherembodiment, the seller's acceptance of the offer for early payment isreceived through the clickable button, and in response to suchacceptance, electronic payment is effected from the buyer to the seller.

Another embodiment of the invention may include presenting a list ofinvoices to the seller on the user interface. The list of invoices areones for which the buyer and any other buyers have offered the sellerearly payment in exchange for a discount of the amount owed at a timewhen no agreed upon discount is available based on the invoice orpre-agreed terms between the buyer and the seller. Clickable buttons areprovided to the seller on the seller user interface. Each button isassociated with an indication of a respective invoice. The buttons allowthe seller to select the corresponding offer.

According to an embodiment of the invention, the manual payment requestis made to an ERP system for the adjusted discount amount. Upon successof the request, a credit memo is issued for the discount amount and thecredit memo is posted to the ERP system.

Another embodiment of the invention is directed to a computerimplemented business system. The computer implemented business systemincludes computer program instructions for exchanging paymentinformation between at least a buyer and at least a seller. The businesssystem also includes a user interface screen for the buyer forconfiguring an offer to the seller of early payment in exchange for adiscount of the amount owed. The user interface screen includes a fieldto receive an annual hurdle rate from the buyer, and a field to receiveselection from the buyer of a set of one or more days of the week. Thesystem also includes computer program instructions for presenting theoffer to the seller on the seller's user interface at a time when noagreed upon discount is available based on the invoice or pre-agreedterms between the buyer and the seller. The system also includes aninterface screen including a clickable button for, the seller toindicate selection of such offer. Further, the system includes computerprogram instructions to automatically cause the discounted payment to beeffected on a day in the selected set of days.

In another embodiment of the invention, in an electronic system in whichpayment information is exchanged between buyers and at least a seller,an identification of a date upon which a seller would like to receiveearly payment is received through a computer input associated with theseller. An identification of the amount of payment the seller would liketo receive is also received from the seller. Invoices upon whichcorresponding offers may be made in order to receive the payment uponthe desired date are automatically identified. The invoices do notcurrently have associated agreed-upon terms that would yield the desiredpayment at the desired date. Through a portion of the system associatedwith the buyer, the buyer is offered the discount in exchange for theearly payment of the invoices. According to an embodiment of theinvention, an identification of a particular buyer is received and theinvoices identified are invoices of the particular buyer.

According to an embodiment of the invention, the total payment and totaldiscount for the identified invoices are displayed. A list of theidentified invoices may also be displayed to the seller, including,according to an embodiment of the invention, the current payment,discounted payment and discount rate for each respective invoice in thelist. Such method may be implemented in the computer implementedbusiness system including computer program instructions and a userinterface screen with applicable instructions and applicable inputfields to receive the respective information, such as the identificationof a date upon which the seller would like to receive the early paymentand identification of the amount of payment the seller would like toreceive early.

Another embodiment of the invention is directed to a relationshipbetween a buyer and a seller where there is a standard discount term,and there is also a discount term in a respective invoice. An electronicinvoice which includes a discount term associated with early payment isreceived from the seller. The discount term from the invoice is comparedwith the standard discount term. Payment is then automatically effectedfrom the buyer to the seller based on the more favorable of the discountterm from the invoice and the standard discount term. The method mayinclude effecting payment based on a discount term included in apurchase order associated with the transaction, if it is determined thepurchase order is more favorable than either of the discount term fromthe invoice or the standard discount term.

Another embodiment of the invention is directed to a method related toenrollment of a new seller in the system. In an electronic system inwhich payment information is exchanged between a buyer and a seller, aset of multiple different payment terms which may apply to transactionsbetween a new seller and buyer is presented as a process of enrollmentof a new seller. Each payment term includes a discount rate, discountdate upon which payment is due to receive the discount, and a netpayment due date. After the enrollment, payment is automaticallyeffected from a seller to the buyer based on the selected payment term.If payment is made on a date between the discount date and the netpayment date, the discount rate is prorated according to the date uponwhich the payment is made between the discount date and the net paymentdate.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows a step curve of adjustable 1%10Net30 terms according to anembodiment of the invention.

FIG. 2a shows a set of discount offers before the final date thediscount is available according to standard terms.

FIG. 2b shows a set of discount offers on the approved date according toan embodiment of the invention.

FIG. 3 shows PMN discount offers on a given day according to anembodiment of the invention.

FIG. 4 shows PMN discount offers in line with pay cycle according to anembodiment of the invention.

FIG. 5 shows a user interface screen allowing the buyer to edit the PMNinformation according to an embodiment of the invention.

FIG. 6 shows a user interface screen for a seller with invoices eligiblefor early payment according to an embodiment of the invention.

FIG. 7 shows a user interface with additional information regarding aninvoice eligible for early payment according to an embodiment of theinvention.

FIG. 8 shows a process flow related to PMN offers according to anembodiment of the invention.

FIG. 9 shows a process flow related to updating information for a PMNprogram according to an embodiment of the invention.

FIG. 10 shows a setup user interface for a seller for making earlypayment offers according to an embodiment of the invention.

FIG. 11 shows a user interface for displaying information to a sellerrelated to the early payment offer according to an embodiment of theinvention.

FIG. 12 shows a user interface screen allowing the buyer to edit theearly payment terms section of a program according to an embodiment ofthe invention.

FIG. 13 shows a flow diagram for a system including e-file according toan embodiment of the invention.

FIG. 14 shows a flow diagram for general payment issuance according toan embodiment of the invention.

FIG. 15 shows a user interface screen for enrollment of a new seller anda system in which the user may select among different payment termsaccording to an embodiment of the invention.

DETAILED DESCRIPTION

An embodiment of the invention is directed to a system for dynamicallyadjusting the terms of payment in a transaction based on electronicnotification of events associated with respective transactions. Forexample, early payments may be made after receipt of electronicnotification of an event such as approval of the respective invoice orrelease of the payment for the invoice. An offer is made for anadjustment of the terms that apply to payment at a time after therespective event. An entity, such as a buyer, may send requests to a setof entities, such as sellers, for offers of terms different than theestablished terms between such entity and the respective other entities.After acceptance of an offer, payment is then effected under the newlyagreed upon terms.

The buyer and seller may negotiate the new terms for payment based ondifferent factors. For example, based on a simple time value of moneybased on a selected interest rate calculation, the change in the paymentamount can be calculated based on the number of days earlier or laterthan the originally agreed-upon settlement date that payments occur. Aninterest rate may be used that is extrapolated from the discountprovided in the seller's original terms, or the original terms in theoriginal agreement between the buyer and the seller. For additionaldescription, see United States patent publication System and Method forVarying Electronic Settlements Between Buyers and Suppliers With DynamicDiscount Terms, application Ser. No. 10/155,806, filed May 24, 2002,(now abandoned), publication number US 2003-0020863, publication dateNov. 27, 2003, invented by Don Holm, Duc Lam, and Xuan McRae which isincorporated herein by reference in its entirety.

The following is a description of various embodiments of the invention.Such processes, structures, systems and architectures may be combinedwith the processes, structures, systems, and architectures described inthe above-referenced patent disclosures or implemented separately,according to various embodiments of the invention.

Certain embodiments of the invention are directed to discountsmanagement which help to provide the buyer the capabilities to identify,capture and track early payment discounts.

Basic discount management functionalities may include:

-   -   Offer additional early payment terms (better than standard        terms) for PO-flip and blank invoice forms,    -   Immediate early payment “pay me now” (“PMN”) on approved        invoices that either have no discounts (i.e., Net60) or have        missed discounts (i.e., approved past the discounted period),    -   Normalization of electronic (e-file) terms to the buyer's        advantage, and    -   Early payment offer on a set of invoices from the supplier to        the buyer.

E-file terms normalization involves changing the terms on the e-fileinvoice to the advantage of the buyer. The normalization process takesthe best of the submitted invoice terms with the supplier's standardterms. For example, an invoice submitted through e-file has the terms1%10Net30 while that supplier's standard terms with the buyer are Net60.The normalized terms will be 1%10Net60.

Another place for discounts is in the area of the buyer offeringadditional early payment terms (presumably better than the supplier'sstandard terms) for PO-flip and blank invoice. For PO-flip, the suppliercan either accept the PO terms or accept any of the newly offered earlypayment terms. For blank invoices, the supplier can choose from eitherthe standard terms or any of the newly offered early payment terms.

Another place for discounts is the buyer offering early immediatepayment (“pay me now,” or “PMN”) to the suppliers. If invoice terms haveno discounts (i.e., Net60), the buyer can offer the supplier PMNoptions. These are discounts on a declining scale for different days thesupplier wants early payment. PMN options can also be offered onapproved invoices that have missed discounts. In this scenario, theapproval date is past the terms' discount date.

Also, early payment may be offered from the suppliers on a set ofinvoices. The supplier will make an offer for the total discount amountsdesired by a certain date for a set of invoices. In particular, theoffer is made on approved invoices only.

Terms

Terms may include: standard terms, early payment terms, PMN terms, andearly payment offer terms.

Standard Terms

A vendor will have existing standard terms with a buyer. The standardterms are recorded in the ERP vendor record. A second type of standardterms are those that appear on a purchase order (PO). This might be thesame as the terms recorded in the vendor record or they could beprovided differently, depending on the PO creation process. In eithercase, the terms on the PO will be considered as the standard terms forthe corresponding invoice automatically created from the PO (invoiceflip). The standard terms can be accessed from the database directoryassociated with the buyers and sellers or from the PO.

Early Payment Terms

Early payment terms are presumably better terms than the standard termsthat a buyer is willing to offer to the supplier. These new earlypayment terms for the supplier are maintained in the database. Earlypayment terms will be offered in addition to the PO terms (for PO-flip)and the standard terms (for blank invoice).

Normal Early Payment Terms

Use of normal early payment terms is the conventional payment termexpressed in the order “discount term/net term.” A discount term sayswhat percentage of the bill may be deducted if the invoice is paidwithin a shorter time interval. A net term says how long the invoice hasto be paid in full. For example, payment terms of “1%/10Net30” would beconsidered early payment terms for suppliers that have standard terms of“Net45.”

Adjustable Early Payment Terms

Adjustable early payment terms is a combination of the conventionalpayment term along with a declining discount rate for the time intervalstarting at the end of the discount term period and ending with the netterm. For example, the terms “Adjustable 1%/10Net30” may look likeFIG. 1. According to an embodiment of the invention, the adjustableslope is a step curve 101 with 1 day being the step size as shown inFIG. 1.

The discount rate of decline is the discount term percentage divided bythe time interval of the slope. In the above example, the rate ofdecline is 0.05%/day (i.e., 1%/[30 days−10 days]). The discountpercentage on a daily basis would be as follows.

Day 1-10: 1% Discount

Day 11: 0.95% Discount

Day 12: 0.90% Discount

Day . . . : . . . % Discount

Day 29: 0.05% Discount

Day 30: 0% Discount

Adjustable early payment terms can also be referred to as ASAP terms.For example, Adjustable 1%/10Net30 may be used as the same as 1%/10Net30ASAP.

FIG. 2a shows a set of discount offers 201 before the final date 202that the discount is available according to standard terms (i.e.,discount offers for days before day 10—days 1 through 9). Thus, there isan inclining slope from the perspective from day 10 to day 1. Thediscount rate of incline is the discount term percentage divided by thetime interval of the slope, according to an embodiment of the invention.In the above example, the rate of incline is 0.05%/day (i.e., 1%/[10days−0 days]). The discount percentage on a daily basis would be asfollows.

Day 10: 1% Discount

Day 09: 1.05% Discount

Day 08: 1.10% Discount

Day 07: . . . % Discount

Day 02: 1.40% Discount

Day 01: 1.45% Discount

Day 00: 1.50% Discount

Adjustable early payment terms with both incline and decline slopes canalso be referred to as Extended ASAP (EASAP) terms. For example,Adjustable 1%/10Net30 may be used as the same as 1%/10Net30 EASAP. Thus,according to an embodiment of the invention, early payment is effectedin accordance with an additional discount at a time in advance of thefinal date 202 at which a discount is available according to standardterms, and the additional discount is inversely proportional to thenumber of days remaining from the day of payment until the final date202 at which a discount is otherwise available according to the standardterms. For example an additional discount of up to 0.5% is available atday 00 as shown above where the total discount is 1.5%. This additionaldiscount goes down to zero of day 10, where the total discount is 1%.According to another embodiment of the invention, the discount isinversely proportional to the number of days remaining until final duedate for payment 203. An example of this may be the combining of theincline and decline slopes described above.

Immediate payment PMN terms can be based on annual hurdle rate, numberof calendar days per year, and pay cycle.

The above parameters are used to calculate the discount offers on a perinvoice basis. To calculate the discount offers, first determine thedaily discount rate:daily discount rate=annual hurdle rate/number of calendar days per year

The discount is calculated from the scheduled pay date back to today.The discount is 0 on the scheduled pay date. The discount for each dayis calculated as:discount=invoice amount times number of days until scheduled pay datetimes daily discount rate

FIG. 2b shows the set of discount offers 204 on the approved date. Astime passes, the current date 301 moves as shown in FIG. 3. As a result,fewer and fewer discount offers 302 will be available to the supplier asshown in FIG. 3.

The discount offers can be continuous daily pay cycle or on a weekly paycycle. For instance, the buyer existing ERP pay cycle may run everyseven days. If the buyer wishes, then the offers can be available onlyon those days (401 a and 401 b) as shown in FIG. 4.

PMN offers are made on approved invoices that have no discounts or havemissed discounts. Invoices with adjustable terms already have a slopebuilt into them and hence do not have PMN offers.

Example 1: Daily Payment

In this example, the buyer has configured for daily payment:

Buyer's Settings:

Annual hurdle rate: 8%

Number of calendar days: 360

Daily Rate: 0.08/360=0.022

Daily payment

Invoice:

Amount $100

Submitted on: Jan. 1, 2003

Terms: 1%/10Net30

Approved on: Jan. 15, 2003

Scheduled Pay Date: Jan. 31, 2003

On Jan. 15, 2003, the discount offers to the supplier will be:

Date Discount Amount Jan. 15, 2003 100 * 16 * 0.08/360 = $35.60 Jan. 16,2003 100 * 15 * 0.08/360 = $33.33 Jan. 17, 2003 100 * 14 * 0.08/360 =$31.11 . . . Jan. 29, 2003 100 * 2 * 0.08/360 = $4.44 Jan. 30, 2003100 * 1 * 0.08/360 = $2.22 Jan. 31, 2003 0

On Jan. 16, 2003, the discount offers to the supplier will be:

Date Discount Amount Jan. 16, 2003 100 * 15 * 0.08/360 = $33.33 Jan. 17,2003 100 * 14 * 0.08/360 = $31.11 . . . Jan. 29, 2003 100 * 2 * 0.08/360= $4.44 Jan. 30, 2003 100 * 1 * 0.08/360 = $2.22 Jan. 31, 2003 0

Example 2: Friday Pay Cycle

In this example, the buyer wants to make the PMN offers in line with paycycle on Friday. Hence, discounts will only be offered on these days.

Buyer's Settings:

Annual hurdle rate: 8%

Number of calendar days: 360

Daily Rate: 0.08/360=0.022

Pay cycle is every Friday

(17th, 24th, 31st)

Invoice:

Amount $100

Submitted on: Jan. 3, 2001

Terms: 1%/10Net30

Approved on: Jan. 15, 2003

Scheduled Pay Date: Jan. 31, 2003

On Jan. 15, 2003, the discount offers to the supplier will be:

Date Discount Amount Jan. 17, 2003 100 * 14 * 0.08/360 Jan. 24, 2003100 * 7 * 0.08/360

On Jan. 24, 2003, the discount offers to the supplier will be:

Date Discount Amount Jan. 24, 2003 100 * 7 * 0.08/360Early Payment Offer Terms

Terms for an early payment offer include a discount percentage on thetotal amount of a collection of invoices if payment is made within a paydate. The supplier offers this discount to the buyer. This offerincludes multiple invoices combined for payment on a single date. Theinvoices may have different due dates, and thus the number of days earlythe payment is to be made, and the effective discount rate, may bedifferent for each invoice. The following is an example:

Pay By Date: Jun. 30, 2002

Invoices Total: $999,342.00

Estimated Payment: $996,210.54

Total Discount: $3,131.46

Average Rate: 0.32%

Buyer Configuration

The buyer may set up configuration information to enable the discountmanagement functionality. The buyer can configure these areas or asubset thereof: early payment terms for PO-flip and blank invoice forms;immediate early payment (“PMN”) programs; and/or E-file normalization.

Buyer Discount Programs

The buyer will be able to create new discount programs through the useof a wizard consisting of multiple screens. The discount program mayhave the following characteristics:

-   -   One is created of the special type “default.” This program will        apply to suppliers not in any other program.    -   A program applies only to a single supplier group.    -   A supplier belongs to one program (except the default program).    -   A program has configuration for all or a subset of the following        functionalities: Early payment terms for PO-flip and blank        invoice forms; PMN; and/or E-file normalization.    -   Creation of a new program through a wizard, i.e., multi-screens.        Buyer User Interface

A screen may show the summary view of all the discount programsavailable to the buyer. From such a screen, the buyer can, according toan embodiment of the invention, click on “New Program” to get a programcreation wizard; edit a particular discount program; activate/deactivatefunctionalities (e.g., PMN, early payment terms, e-file normalization)of a program.

A screen to initiate editing of programs is provided according to anembodiment of the invention. The screen may provide a description ofeach functionality and the current terms, e.g., PMN with an annualhurdle rate of 7.75% and daily discount rate of 0.021%; supplierdiscount terms of 1% 10/Net 30; 1.5% 10/Net 45; 2% 10/Net 60; whethere-file normalization is active.

Early Immediate Payment (“PMN”)

A screen allowing the buyer to edit the PMN section of a program isshown in FIG. 5. The screen 501 provides inputs for entry of annualhurdle rate 502 and selection of days of the week 503 upon which paymentmay be made (e.g., Monday, Tuesday, Wednesday, Thursday, Friday,Saturday and Sunday). The screen may also display the daily discountrate 504.

Thus, an embodiment of the invention includes a computer implementedbusiness system comprising computer program instructions for exchangingpayment information between at least a buyer and at least a seller, anda user interface screen for the buyer for configuring an offer to theseller of early payment in exchange for a discount of the amount owed.The user interface screen includes a field to receive an annual hurdlerate from the buyer, and a field to receive selection from the buyer ofa set of one or more days of the week.

The system includes computer program instructions for presenting theoffer to the seller on the seller's user interface at a time when noagreed upon discount is available based on the invoice or pre-agreedterms between the buyer and the seller. The system also includes a userinterface screen 601 including a clickable button 602 for the seller toindicate selection of such offer and computer program instructions toautomatically cause the discounted payment to be effected on a day inthe selected set of days.

The PMN portion of the discount program consists of the followingattributes, according to an embodiment of the invention:

-   -   Active: Whether to offer PMN in the associated discount program        or not.    -   Annual hurdle rate (%): The annual hurdle rate for all suppliers        in this program.    -   Number of calendar days per year: Use to calculate the daily        cost of capital.    -   Daily cost of capital (computed): The daily cost of capital is        computed as annual hurdle rate/calendar days per year. Use the        number of calendar days for the year from the general settings.    -   Discount pay cycle: PMN offers are made on a daily basis or on        days specified by the pay cycle.    -   Apply to net terms: This attribute will determine whether to        only offer PMN for invoices with only net terms.

The discount pay cycle will determine which days to make PMN offer on.It is based on the schedule for the pay cycle. If the schedule is forthe pay cycle to be daily, offers will be made for payment on everybanking business day. If the schedule is for the pay cycle to be weekly,offers will be made for payment on selected days. If the actual date ison a banking holiday, no offer will be made for payment on that day. Thesystem provides the buyer the opportunity to select the respective dayor days of the week upon which the payment is to be made.

PMN options are available on approved invoices that have:

-   -   Missed discounts, i.e., invoice approved after discount due        date, AND    -   The supplier for that invoice belongs in a discount program        where the PMN section is active.

General Process Flow

The general process flow of PMN is:

1. Invoice approved status upload from ERP to system.

2. Figure out which “program” the invoice falls into.

3. Generate and save the offers on the disburser side (buyer system).

4. Send the “program” details/offers for the invoice to the collector(seller system).

5. Collector receives invoice's program details.

6. Generate and save the offers on the collector side.

7a. Supplier does not accept PMN. Invoice will be paid through normalprocess. End of process.

7b. Supplier accepts PMN.

8. Offer acceptance message to disburser.

9. Disburser schedule early payment for invoice.

10. Disburser back office swipes through all scheduled early paymentinvoice. Activate early payment issuance instruction to the ERP system.

The following is the flow between states related to PMN status. Thestatus “INI” (initial) is reached when the offer is made. The disburserback office will generate the offer and save this status. This will besent to the collector side as well. When the supplier accepts an offerfrom the collector user interface, the status will be changed to “ACP”for acceptance. When the invoice is paid, then the status will bechanged to “PD” for paid. If no offer is accepted, the status will bechanged to “EXP” when the invoice paid status is processed on thecollector side.

FIG. 6 shows a user interface 601 for a seller with invoices eligiblefor early payment. Thus, the system may include a user interface screenfor the seller including a list of invoices 603 for which the buyer andany other buyers have offered the seller early payment in exchange for adiscount of the amount owed at a time when no agreed upon discount isavailable based on the invoice or pre-agreed terms between the buyer andthe seller. The user interface also includes clickable buttons 604, eachin proximity to the indication of each invoice, for the seller toindicate interest in the corresponding offer.

When the supplier clicks on the “Pay Me Now” button, the next screenwill show the first early payment day and the associated discount rate.The supplier can confirm to accept this early payment date or click on“More Options” to see the complete list of early payment days.

If the supplier clicks on the “More Options,” the supplier will bepresented with another screen 701, the complete list 702 of all earlypayment days and associated discount rates as shown in FIG. 7. Thesupplier can “Select” 703 to accept a respective early payment day.

Early Payment Discount Offer by Seller

In addition to accepting the early immediate payment PMN terms offeredby the buyer, the supplier can make an early payment discount offer on aset of approved invoices. A screen in the seller's user interface mayinclude the “Early Payment Offer” button. The “Early Payment Offer”button may be available on early payment screens.

FIG. 8 shows a process flow related to PMN offers according to anembodiment of the invention. The process flow includes actions takingplace in the disburser/buyer system 801 and in the collector/sellersystem 802. In an ERP agent, an invoice is approved (block 803), andthen this information is uploaded to buyer system 801 (block 804). Thestatus is updated on the collector/seller system 802 (block 812). Notethat blocks 804-809 and 812, 810 and 811 are back office processes (BO).As seller system 802 is informed of the invoice approved status (block812), seller system 802 can check for the presence of a PMN program.

Buyer system 801 checks whether the invoice matches any PMN program(block 805). If no PMN program is found, the process is completed (block806). If the invoice matches a PMN program, the invoice is caused toreference this version of the PMN program (block 807). PMN offers aregenerated and saved to the database (block 808), and a PMN program issent for an invoice (block 809). A PMN message is sent from buyer system801 to collector system 802. The invoice is referenced in seller system802 (block 810), and PMN offers are generated and saved to the database(block 811).

FIG. 9 shows a process flow related to updating information for a PMNprogram according to an embodiment of the invention. Thus, this figureshows an approach that the system may take after a PMN offer has beengenerated for an invoice and the buyer changes information in a discountprogram information. The system looks for existing invoices with offers,and regenerates these.

Thus, FIG. 9 shows communication between buyer (disburser) system 901and seller (collector) system 902 starting with a PMN program change(block 903). The program change takes place at the application level(APP). Other processes shown are back office processes (e.g., block904). The invoices in the program are found in buyer system 901 (block904), and the invoice status is updated to seller system 902 (block919). If invoices are found (block 905) on buyer system 901, therespective invoices are caused to reference this version of the PMNprogram (block 906). PMN offers are generated and saved to the database(block 907), and an update of the PMN program is sent from buyer system901 to seller system 902 (block 908). Seller system 902 receives thisupdate and processes a PMN update on seller system 902 (block 909).Seller system 902 finds prior version invoices in the PMN program(blocks 910 and 911), and determines whether the supplier has acceptedan offer on a previous version of a PMN program (block 912). If thesupplier has accepted such an offer, the process is ended with anexception (block 914).

If supplier has not accepted such an offer, the PMN program is updatedfor the invoice (block 915), and PMN offers are generated and saved tothe database (block 916). Next, seller system 902 sends a PMN programupdate commit for the respective invoices (block 917), and buyer system901 receives this update (block 918).

According to an embodiment of the invention, the supplier will see thescreen 1001 shown in FIG. 10 upon clicking on the “Early Payment Offer.”Here, the supplier can choose the buyer 1002 to make the offer to, thedate payment would like to be received 1003, the total amount to collect1004, and the desired annual cost of capital 1005.

Thus, an embodiment of the invention includes a user interface screenfor configuring offers to sellers of discounts in exchange for earlypayment including a field for identification of a date upon which theseller would like to receive the early payment and a field foridentification of the amount of payment the seller would like to receiveearly. The system also includes computer program instructions forautomatically identifying invoices upon which corresponding offers maybe made in order to receive the payment upon the desired date. Theinvoices do not currently have associated agreed-upon terms that wouldyield the desired payment at the desired date. The system furtherincludes computer program instructions for offering to the buyer thediscount in exchange for the early payment.

For the specified total amount that the supplier would like to becollected and desired annual cost of capital, the system determineswhich invoices 1101 will be part of this offer. This is displayed asshown in FIG. 11. The actual total amount 1102 and total discount 1103are displayed. The actual amount 1104 and discount 1105 are displayed atthe invoice level.

A screen 1201 allowing the buyer to edit the early payment terms sectionof a program is shown in FIG. 12. This screen allows the user toactivate or de-activate the program, for example through a clickableselection 1202. Terms can be selected through a window 1203 anddisplayed in another window 1204.

Buyer New Discount Program Wizard

A first page of a wizard may allow the buyer to choose the suppliergroup for this program. A second step of the wizard may provideconfiguration of a PMN function.

A third step of the wizard may allow for configuration of the earlypayment terms for PO-flip and blank invoice forms. Supplier discountterms allow approved suppliers to select from a list of buyer approveddiscount terms while creating an invoice. Available discount terms areselected from a box, and selected terms are shown in a neighboring box.

The fourth step of the wizard may allow for configuration of the e-filenormalization section.

Early Payment Terms for PO-Flip and Blank Invoice Forms

The buyer will be able to turn on or off the availability of earlypayment terms for PO-flip and blank invoice form for a discount program.Additionally, the buyer will be able to define the list of terms aswell.

The early payment terms portion of the discount program has thefollowing attributes:

-   -   Active: Whether the early payment terms portion is active for        program.    -   List of Terms: The terms that will be offered in this program.

In the user interface, the buyer can check/uncheck the flag (e.g.“active”) to make early payment terms active/inactive for the associateddiscount program. The buyer will be able to add or remove terms from theselected list in the user interface.

E-File Normalization

An embodiment of the invention is directed to “e-file normalization.”The user interface allows activation of e-file normalization. The e-filenormalization screen will show the active flag. The buyer cancheck/uncheck the checkbox.

E-File Discount Capture

The e-file discount functionality is normalizing the submitted invoiceterms and the supplier's standard terms to the buyer's advantage.Normalization is done by taking the better of both discount (if any)terms and net components of the payment terms. These normalized termswill be saved in the existing invoice terms field. A new field will becreated to store the submitted e-file terms.

Thus, in an electronic system in which payment information is exchangedbetween a buyer and a seller, an electronic invoice is received from theseller, the system has a stored standard discount term with respect totransactions between the buyer and seller, and the invoice includes adiscount term associated with early payment. The discount term from theinvoice is compared with the standard discount term, and payment fromthe buyer to the seller is automatically effected based on the morefavorable of the discount term from the invoice and the standarddiscount term.

The following is the set of rules to follow during normalizationexecuted in this order:

-   -   Any potential discount is better than no discount.    -   A higher discount is better than a lower discount.        -   The higher discount terms will be taken as a whole. There is            no normalization of the discount periods.    -   If the discount is the same, take the one with the longer        discount period.    -   A longer net term is better than a shorter net term.

Which “standard terms” to normalize will be based on the following setof rules:

-   -   If the invoice has a PO, then normalize with the PO terms.    -   If a default system invoice posting matched found against remit        address, then normalize with the standard terms of that system        record.    -   Otherwise, normalize with all accepted and matched system        standard terms with that remit address.

FIG. 13 shows a flow diagram for a system including e-file according toan embodiment of the invention. Information about respective vendors isloaded into the system from an ERP system database 1311 through ERPagent 1308 (line 1310). When the invoice is approved, it is posted tothe ERP system database 1311 through ERP agent 1308. Before it isposted, the normalization process as shown takes place: Standard termsare uploaded from ERP system 1311 (block 1309). An invoice is submitted(block 1301) and received in the seller system (block 1302). The system,through a central storage system (block 1304), provides informationregarding the invoice to the buyer system (block 1306). A work flowapproval process may be involved (block 1307).

The invoice is posted (line 1314). If the e-file terms (those terms onthe invoice) are better than the standard terms negotiated between thebuyer and the seller (block 1313), then the better of those terms areselected and used (block 1312). These terms are then provided to the ERPagent (block 1308) and used in the transaction. The payment is executedthrough the disburser (block 1306), and payment is executed (block1305).

Early Payment Issuance

According to embodiments of the invention, the system will ensure promptdiscounted payment issuance. One method is issuance against thediscounted portion of the terms. If an invoice is approved within thediscount terms period, the system will issue a manual payment request tothe ERP system for the full discounted amount as specified by theconventional portion of the terms. This request will be issued at theend of the discount period compensating for ACH processing time. Uponsuccess of the request, the payment will be applied to the invoice atthe full discounted amount in the ERP system. Once that is complete, thesystem will then issue the actual payment to the supplier. This is anatomic transaction that will occur within one day. Hence, the order ofoperations might change.

Another method is issuance against a non-conventional portion of theterms, i.e., adjustable portion, PMN, and early payment discount offer.If an invoice is approved outside the conventional discount termsperiod, the XPSN will issue a manual payment request to the ERP systemfor the adjusted discount amount. This request will be issued on theadjusted date for the discount compensating for ACH processing time.Upon success of the request, the XPSN will issue a credit memo for thediscount amount and post this credit memo to the ERP system. The paymentwill then be applied to the full amount of the invoice and the fullamount of the credit memo, thereby bringing the net balance to 0. Thisis an atomic transaction that will occur within one day. Hence, theorder of operations might change.

For invoices approved during the net terms, the system will NOT issueearly payment for these cases by default. However, the buyer canconfigure the system to do so, thereby ensuring early payment withoutwaiting for the ERP pay cycle.

Normal Early Payment Terms Payment Issuance

If the invoice with these terms is approved within the discountedperiod, the system will issue an early payment at the end of the period.For the period between net term and end of discount term, the buyer willconfigure whether the system will issue an early payment on the approveddate. If the invoice is approved outside the net term, the payment willbe issued through the ERP pay cycle.

For example, an invoice is submitted with 1%10Net30 terms on Jan. 1,2003. The scheduled pay date for this invoice will be Jan. 30, 2003. Ifthe invoice is approved any day before Jan. 10, 2003, the payment willbe issued on Jan. 10, 2003. If the invoice is approved between Jan. 10,2003 through Jan. 30, 2003, there are two scenarios. If the buyerconfigures the system to issue early payment for that period, paymentwill be issued on the approved date. Otherwise, the payment will beissued by the ERP pay cycle. The actual payment date will then be afterthe scheduled pay date. If the invoice is approved after the net terms,the ERP pay cycle will issue the payment, which will be after thescheduled pay date as well.

Adjustable Early Payment Terms Payment Issuance

If the invoice with these terms is approved within the conventionaldiscounted period, the system will issue an early payment at the end ofthe period. For the period between the net term and the end of discountterm, the system will issue an early payment on the approved date. Ifthe invoice is approved outside the net term, the payment will be issuedthrough the ERP pay cycle.

For example, an invoice is submitted with Adjustable 1%10Net30 on Jan.1, 2003. The scheduled pay date for this invoice will be Jan. 30, 2003.If the invoice is approved any day before Jan. 20, 2003, the paymentwill be issued on Jan. 10, 2003. If the invoice is approved between Jan.20, 2003 through Jan. 30, 2003, the XPSN will issue payment on theapproved date. If the invoice is approved after the net terms, the ERPpay cycle will issue the payment, which will be after the scheduled paydate.

FIG. 14 shows a flow diagram for general payment issuance according toan embodiment of the invention. This process flow includes communicationbetween disburser/buyer system 1403 and collector/seller system 1404.The invoice is approved at disburser 1413 and an appropriatenotification (notification 1405) is sent to collector 1404. After theappropriate processes are run, payment is made from disburser/buyersystem 1403 to collector/seller system 1404 (notification 1406). Adatabase system and computer system 1402 facilitate this communication.

If no early payment terms are applicable (block 1409), then noparticular action is taken for this process, and the ERP system issuespayment with the normal pay cycle (block 1410). If there are earlypayment terms (block 1409), and the invoice has been approved within thediscount terms (block 1413), then determine whether the invoice has beenapproved within the net terms and the buyer has configured the system toissue early payment for net terms (block 1414). If this is not the case,no additional action is taken in this process, and the ERP system issuespayment with the normal payment cycle (block 1417). Otherwise, paymentis issued within this process (block 1416), and a credit memo may beissued (block 1412). As appropriate, manual payment is created andapplied to the invoice (block 1411), and the ERP agent 1408 interactswith the ERP system 1401 to cause the appropriate action to be taken byERP system 1401. If the invoice is approved within the discount terms(block 1413), the system schedules payment issuance at the end of thediscount terms (block 1415), and a credit memo is created if applicable(block 1412).

Enrollment and Terms

During the supplier enrollment process, the buyer can offer eachsupplier all the different types of discount terms described in thisdocument as shown in FIG. 15. Thus, according to an embodiment of theinvention, in the process of an enrollment of a new seller in thesystem, a set including multiple different payment terms 1502 which mayapply to transactions between the new seller and buyers is presented,for example on a user interface screen 1501. Each payment term includesa discount rate, discount date upon which payment is due to receive thediscount, and a payment due date. After the enrollment, payment isautomatically effected from the seller to the buyer based on theselected payment term. If such payment is made on a date between thediscount date and the net payment date, discount rate is proratedaccording to the date upon which the payment is made between thediscount date and the net payment date.

The description herein of various embodiments of the invention has beenpresented for purposes of illustration and description. It is notintended to limit the invention to the precise forms described.

What is claimed is:
 1. A computer-implemented method for managingdiscounts through interfacing with a seller system, a buyer system, andan enterprise resource management (ERP) system, the method comprising:receiving from the ERP system, at a programmed computer, electronicpayment information exchanged between the buyer system and the sellersystem over a network; providing a seller user interface for display onthe seller system, the seller user interface enabling formulation ofearly payment offers for multiple invoices, the seller user interfaceincluding selectable parameters including a buyer selection, an earlypayment date selection, and a payment amount selection, wherein themultiple invoices comprise at least a standard invoice based on standardpayment terms and an e-file invoice based on e-file payment terms;receiving, at the programmed computer, through seller selection at theseller user interface, an identification of a desired early paymentdate, a desired payment amount, and a particular buyer; identifying, bythe programmed computer, invoices for the particular buyer eligible toreceive corresponding offers for a discount, wherein eligibility isbased on the desired payment date and the desired payment amountidentified by the seller, and wherein the identified invoices do notcurrently have associated agreed-upon terms that would yield the desiredpayment amount on the desired payment date; generating a list of theidentified invoices for the particular buyer selected through the selleruser interface; displaying an interactive version of the generated liston an early payment summary seller user interface, the interactiveversion of the generated list enabling seller confirmation of the earlypayment offers for the identified invoices, the interactive listcomprising a current payment due, a discount payment offered, and adiscount rate for each of the identified invoices, wherein the discountrate is based on a daily discount rate calculated as an annual hurdlerate divided by a number of calendar days per year; transmitting, by theprogrammed computer, to the buyer system of the particular buyer, offersfor the discount in exchange for the early payment of a plurality of theidentified invoices confirmed by the seller, the discounts offeredsatisfying the desired payment amount on the desired payment dateidentified by the seller, the offers displayed on a buyer user interfaceviewable by the buyer; displaying, by the buyer user interface, asummary view of all discount programs available to the buyer includingcorresponding selectable icons displaying an icon for a new discountprogram, an icon for editing the discount rate for each of theidentified invoices, and an icon for activating or deactivating e-filenormalization; analyzing, at the buyer system, the offers confirmed bythe seller to determine net components of payment terms of the pluralityof the identified invoices, identify e-file payment terms and standardpayment terms of the plurality of the identified invoices, and normalizethe identified e-file terms and the identified standard terms byactivating the icon for the e-file normalization, wherein the e-filenormalization involves changing the e-file payment terms on the e-fileinvoice to an advantage of the buyer; and automatically effectingpayment from the buyer system to the seller system based on thenormalized terms.
 2. The method of claim 1, further comprising receivingan identification of a cost of capital from the seller, wherein theidentifying of invoices upon which corresponding offers may be madecomprises identifying invoices based on the cost of capital identified.3. The method of claim 1, further comprising displaying a total paymentamount and a total discount amount for the identified invoices.
 4. Themethod of claim 1, further comprising providing a selectable earlypayment offer button on the seller user interface.
 5. The method ofclaim 1, wherein the seller selections define a program change and theprogrammed computer causes invoices found on the buyer system toreference the program change.
 6. The method of claim 1, whereinnormalization comprises the following set of rules: any potentialdiscount is selected over no discount; a higher discount is selectedover a lower discount; if the discount is the same, select the discountwith a longer discount period; a longer net term is selected over ashorter net term.
 7. A computer system for managing discounts throughinterfacing with a seller system, a buyer system, and an enterpriseresource management (ERP) system, the computer system, comprising: amemory; a processing device communicatively coupled to said memory, saidprocessing device configured to: receive payment information exchangedbetween buyers and sellers from the ERP system; provide a seller userinterface for display on the seller system, the seller user interfaceenabling formulation of early payment offers for multiple invoices, theseller user interface including selectable parameters including a buyerselection, an early payment date selection, and a payment amountselection, wherein the multiple invoices comprise at least a standardinvoice based on standard payment terms and an e-file invoice based one-file payment terms; receive an identification through seller selectionat the seller user interface, of a desired early payment date, a desiredpayment amount, and a particular buyer; identify invoices for theparticular buyer eligible to receive corresponding offers for adiscount, wherein eligibility is based on the desired payment date andthe desired payment amount identified by the seller, and wherein theidentified invoices do not currently have associated agreed-upon termsthat would yield the desired payment amount on the desired payment date;generate a list of identified invoices for the particular buyer selectedthrough the seller user interface; display an interactive version of thegenerated list comprising a current payment due, a discount paymentoffered, and a discount rate for each of the identified invoices, saidlist displayed on an early payment summary seller user interface, theinteractive version of the generated list enabling seller confirmationof the early payment offers for the identified invoices, wherein thediscount rate is based on a daily discount rate calculated as an annualhurdle rate divided by a number of calendar days per year; transmit tothe buyer system of the particular buyer offers for the discount inexchange for the early payment of a plurality of the identified invoicesconfirmed by the seller, the discounts offered satisfying the desiredpayment amount on the desired payment date identified by the seller, theoffer displayed on a buyer user interface viewable by the buyer;display, by the buyer user interface, a summary view of all discountprograms available to the buyer including corresponding selectable iconsdisplaying an icon for a new discount program, an icon for editing thediscount rate for each of the identified invoices, and an icon foractivating or deactivating e-file normalization; analyze the offersconfirmed by the seller to determine net components of payment terms ofthe plurality of the identified invoices; identify e-file payment termsand standard payment terms of the plurality of the identified invoices;normalize the identified e-file terms and the identified standard termsby activating the icon for the e-file normalization, wherein the e-filenormalization involves changing the e-file payment terms on the e-fileinvoice to an advantage of the buyer; and automatically effect paymentfrom the buyer system to the seller system based on the normalizedterms.
 8. The system of claim 7, wherein the processing device providesa selectable early payment offer button on the seller user interface. 9.The system of claim 7, wherein the seller selections define a programchange and the processing device causes invoices found on the buyersystem to reference the program change.
 10. The system of claim 7,wherein normalization comprises the following set of rules: anypotential discount is selected over no discount; a higher discount isselected over a lower discount; if the discount is the same, select thediscount with a longer discount period; a longer net term is selectedover a shorter net term.